Saturday, June 22, 2024
HomeBusinessEconomyPanama to strengthen MSMEs sustainability amid the pandemic with IDB support

Panama to strengthen MSMEs sustainability amid the pandemic with IDB support

PANAMA /USA – The Inter-American Development Bank (IDB) has approved a $150 million loan to support the sustainability of Panama’s micro-small- and mid-sized enterprises (MSMEs) amid the COVID-19 pandemic and promote employment by providing access to financing. This operation is part of IDB’s efforts to uphold Panama’s productive fabric with a total $300 million in funding, of which an initial tranche of $150 million was approved in June 2020.

The assistance will provide MSMEs with access to mid-term financing in order to help Panama restore its productive capacity and implement production restructuring measures to deal with the impacts of the pandemic. The program’s resources will be executed by a trust managed by the Banco Nacional de Panamá (BNP) and will be channeled through eligible financial institutions.

This operation is aligned with the five main lines of action of Vision 2020-2025, the IDB Group’s plan to promote economic and social development in Latin America and the Caribbean. At the IDB we are supporting MSMEs through policies and regulatory frameworks aimed and fostering productive financing and value chains as well as financial inclusion, and funding second-floor banking and guarantee funds to leverage private financial systems such as those present in Panama, among other actions.

There are an estimated 200,000 MSMEs in Panama, representing 96.3 percent of all enterprises and accounting for 49 percent of formal employment. According to 2016 figures, MSMEs generate $6.5 billion in revenues, of which 41.6 percent is provided by small enterprises, 40.9 percent by mid-sized enterprises, and 17.5 percent by microenterprises.

This operation’s resources will particularly target MSMEs affected by the COVID-19 crisis and their agrifood value chains, including agricultural production and food-processing and trade activities. It is expected to have a positive impact on job creation and economic activity in general, benefiting more than 1,600 MSMEs. In addition, it is expected to have a helpful effect on other priority IDB Group Vision 2020-2025 areas by providing financing to women-led MSMEs as well as enterprises that play a role in climate change impact reduction.

The IDB’s $150 million loan is for a 25-year term, with a 5.5-year grace period and an interest rate based on LIBOR.



Please enter your comment!
Please enter your name here


Caribbean News

St Lucia’s security challenges continues

- A New Minister of Home Affairs assumes office - DPP highlights nothing progressive - RSLPF's Sgt. 806 Ann Joseph reports on progress following the recent...

Global News

BRICS experts favour establishing headquarters for development of nuclear medicine

MOSCOW, Russia, (TV Brics) - At the First International Forum on Nuclear Medicine of the BRICS countries, it was proposed to establish a headquarters...